International Finance Corporation (IFC), a member of the World Bank Group, is considering a proposal to extend a loan package of $150 million to Indonesian non-banking finance institution (NBFI) Finansia Multi Finance.
In a pre-investment disclosure, IFC said the package will comprise of senior loans committed in tranches to support Finansia’s lending programme to middle-low income households and MSMEs.
The proposed loan will have a three to five-year tenure. Such funding, according to IFC, is not readily available to Indonesian NBFIs given the impact of the COVID-19 situation on market liquidity.
Finansia focuses on providing financing to micro and small entrepreneur/businesses, with motorcycles or cars as collateral. As of December 2019, the company’s total assets stood at around $245 million, with equity of around $41 million.
The firm is 80-per cent owned by KB Kookmin Card, the second-largest credit card issuing company in South Korea. KB Kookmin Card completed the stake acquisition in July 2020.
IFC said Finansia’s lending programme will “bridge the financing gap for the bottom-of-pyramid entrepreneurs” who raised working capital by collaterising their vehicles.
The lending will also provide “funding support to their customers’ operating cash flow to promote jobs as well as broader stability during COVID-19,” IFC added.
IFC said on its website that it is providing $8 billion in fast-track financial support to existing clients to help sustain economies and preserve jobs during this global crisis, which will likely hit the poorest and most vulnerable countries the hardest.
Its COVID-19 response fundings include $35 million to Bangladesh Prime Bank and $40 million to City Bank, $25 million to Cambodia’s Hattha Kaksekar Limited, $150 million to Vietnam Prosperity Joint Stock Commercial Bank, $35 million to India’s JK Paper, and $150 million to China’s Muyuan Foods.
In May, IFC proposed a $5-million equity investment in Indonesian insurtech startup Pasarpolis. It also recently proposed to extend up to $120 million in a loan facility to LOGOS Property Group Ltd’s subsidiaries, which are located in Indonesia.